May 23 – The Bank of England and the People’s Bank of China are working towards a joint RMB/GBP currency swap line after the banks’ governors met earlier this year to discuss a reciprocal exchange arrangement.
According to the Bank of England, the agreement will initiate a three-year currency swap program designed to “finance trade and direct investment between the two countries,” as well as strengthen the financial stability of the currency markets. As a result, England will be the first G7 nation to have direct access to the RMB. Continue reading
May 23 – China’s first national Mental Health Law (hereinafter referred to as the ‘Law’), which has taken almost 27 years to draft, came into effect on May 1, 2013. The Law for the first time explicitly forbids the involuntary confinement of individuals with mental disorders, and offers greater protection to employees suffering from such disorders. Detailed information can be found below. Continue reading
May 22 – China’s “Good Supply Practice of Pharmaceutical Products,” issued in 2000, has played an important role in regulating pharmaceutical operation activities and ensuring drug quality and safety over the past decade. However, with the country’s rapid economic and social development in recent years, some provisions of the current Good Supply Practice of Pharmaceutical Products have fallen behind the times, and are therefore hindering the healthy development of the pharmaceutical industry.
In response, China’s State Food and Drug Administration (SFDA) started revising the Good Supply Practice of Pharmaceutical Products in 2009 and now, after three rounds of public consultation, China’s Ministry of Health (MOH) at last released the newly-revised “Good Supply Practice of Pharmaceutical Products (MOH Decree No. 90, hereinafter referred to as ‘Revised GSP Standards’)” on January 22, which is scheduled to take effect on June 1, 2013. Continue reading
May 21 – China’s State Administration of Foreign Exchange (SAFE) released the “Circular on Administrative Measures for Foreign Debt Registration (huifa  No.19, hereinafter referred to as ‘Circular’)” on April 28, which came into effect on May 13, 2013. Five distinct features of the Circular can be found below. Continue reading
May 20 – With the view to encourage private investment in the insurance industry, China’s Insurance Regulatory Commission (CIRC) released the “Circular on Relevant Issues regarding the Investment and Shareholding of Limited Partnership Equity Investment Enterprises in Insurance Companies (Baojianfa  No. 36, hereinafter referred to as the ‘Circular’)” on April 24, which allows limited partnership equity investment enterprises to invest in the country’s insurance companies.
The Circular sets out the requirements for a limited partnership equity investment enterprise to invest in an insurance company and outlines the application materials required by the CIRC. The Circular applies to all Chinese insurance companies in which the shareholding of all foreign investors is less than 25 percent, as well as domestic and foreign-invested limited partnership equity investment enterprises. Detailed information can be found below. Continue reading
May 17 – In order to fully implement the “Regulations on Work-Related Injury Insurance (hereinafter referred to as ‘Regulations’),” China’s Ministry of Human Resources and Social Security (MOHRSS) released the “Opinions on Certain Issues Concerning the Implementation of the Regulations on Work-Related Injury Insurance (Renshebufa  No.34, hereinafter referred to as the ‘Opinions’)” on April 25, 2013, which clarifies several issues regarding the implementation of the Regulations. Detailed information can be found below. Continue reading
May 16 – China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) jointly released the “Catalogue of Priority Industries for Foreign Investment in Central and Western China (hereinafter referred to as the ‘Catalogue’)” on May 14, which is scheduled to take effect on June 10, 2013. The Catalogue replaces its predecessor issued in 2008, and adds 173 categories to the original list.
According to the “Provisions on Guiding Foreign Investment,” foreign-invested projects included in the Catalogue are entitled to the preferential policies granted for the foreign-invested projects under the encouraged category. The Catalogue is organized by province, covering 22 out of the 31 provincial-level administrative regions in Mainland China. Selected industries for each provincial-level region can be found below. Continue reading
By Eunice Ku and Shirley Zhang
May 15 – For foreigners doing business in China, tax is always a key concern. As a foreign business or individual, income derived from China may be subject to taxes in both your home country and China, which could substantially increase your tax burden.
Under China’s Corporate Income Tax (CIT) Law, a non-resident enterprise (i.e., an enterprise organized outside of China and whose effective management is not within China) without an establishment or venue in China is subject to CIT at a withholding rate of 10 percent on their China-sourced income, which includes:
- Income from property transfers;
- Income from equity investment such as dividends and bonuses;
- Income derived from interests, rentals and royalties;
- Income derived from donations; and
- Any other income. Continue reading